Govt signs deal for Hydrocarbon project in Neduvasal, protests intensify

Govt refutes villagers on impact on livelihood & environment, says technology is used worldwide

The Government of India signed a contract for the Discovered Small Fields (DSF) Bid 2016 with GEM Laboratories on Monday for extracting Hydrocarbons at Neduvasal, in Tamil Nadu, even as protests from local villagers against the proposed plan intensified, following the development.

The contract was one of the many signed for 31 areas under the DSF Bid Round 2016. The awardees were present at an event in New Delhi, presided by Minister of State (Independent Charge) for Petroleum and Natural Gas, Dharmendra Pradhan.

The Minister said that the cumulative peak production from the 31 fields is expected to be around 15,000 barrels per day (bpd) of oil and two million metric standard cubic metres per day (mmscmd) of gas over the economic life of the asset. The estimated total revenue would be approximately Rs 46,400 crore, of which royalty collection and Government's revenue share is expected to be around Rs 5,000 crore and Rs 9,300 crore, respectively. It is also estimated that employment for about 37,500 persons would be generated through these fields.

Recently, the Petroleum Minister along with Minister of State (Independent Charge) for Commerce and Industry, Nirmala Sitharaman and Minister of State for Road Transport and Highways, Pon Radhakrishnan met a delegation of representatives from Neduvasal village of Tamil Nadu, to address their concerns on exploration in that area. The ministers assured the villagers that the work on the field would start only after the Government of Tamil Nadu addressed local concerns in consultation with the Centre. The Central Government had earlier said exploration would not affect agriculture or the soil of the entire lease area.

The protesters conducted a meeting in Chennai on Monday, after an announcement about signing of the contract was made. They have already been agitating against the project for the past several months, in various parts of the state.

Neduvasal, a fertile village of the Cauvery delta bordering Pudukottai and Thanjavur districts, is one of the 31 contract areas of small fields where exploration of hydrocarbons is to be taken up as per a recent decision of the Cabinet Committee on Economic Affairs (CCEA). Villagers began protesting against the decision saying it would impact their livelihood.

These fields were offered under a new policy for small fields known as the Discovered Small Field (DSF) policy, 2015.

There have been three operational Exploration Blocks spread over about 1,461 sq km under production sharing contract (PSC) system in Tamil Nadu where hydrocarbon exploration is to take place, the central government had said earlier. Under the nomination regime, 31 mining leases covering 3,500 sq km have been granted in the State from where 600 tonnes of oil and three million cubic metres of natural gas are produced per day. More than 700 wells have been drilled for extraction of oil and gas in the Tamil Nadu.

"These active operations are not hampering agriculture in nearby areas and do not pose any known environmental impact or health hazards on living beings of the operational area," said the Centre.

Two contract areas, Karaikal (10.4 sq km) in Puducherry and Neduvasal (10 sq km) in Tamil Nadu, awarded under the DSF bidding round, have an in-place volume of 4,30,000 metric tonnes of oil and oil-equivalent gas.

The concerns raised over the project include impact on agriculture and soil condition in the region, contamination of ground water table and effect of Methane generation, among others.

The Government claims extraction of oil and gas from the sub-surface is an established practice and the E&P industry uses state-of-the-art technology for operations, even as it takes maximum care to minismise environmental degradation. The operators also get an environment impact assessment done before carrying out any drilling activities and other activities.

The process of drilling and production requires very limited surface land area (generally 120x120 square meter) which will not affect agriculture or the soil of the entire lease area. Additionally, operators are required to follow strict environmental norms for the use of operational land.

Oil and gas extraction is being carried out from deeper earth area (generally more than 1,000 metres), and doesn't affect ground water aquifers, which are located at much shallower levels. Hydrocarbon extraction method is being used worldwide which has not directly impacted the water resources of the area being mined. Also, while drilling for oil and gas, cement casing is used; hence, there is no impact on groundwater as such. Methane, the principal component of natural gas, is being used as household fuel globally in the form of PNG.

Others concerns about adverse environmental impact on nearby areas and the people living there are also misplaced, as all petroleum operations require prior environmental clearances from Ministry of Environmental and Forest, wherein public hearing is an integral part of obtaining these clearances.